- January 19, 2024
- Posted by: legaleseblogger
- Category: Related News
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Seeking Advice on Transitioning RRSP
Introduction
I inherited my FA from my parents which simply means my Financial Advisor who has helped me set up my Registered Retirement Savings Plan (RRSP) with him through Investia when I was 18. While being employed by Investia, he has also been assisting me and my parents with tax filings annually. Being immigrants to Canada and having established a longstanding relationship with him, we have found him to be helpful, at least initially. However, over the years, I have started facing several issues with his services which I feel the need to address now.
Current Situation
Currently, my RRSP consists of TD Mutual Funds with an MER as high as 2 – 2.3%. As I am not financially well off, I find it concerning that the fees will continue to grow as my investments grow, which may eventually impact my future planning adversely. Moreover, there seems to be a lack of transparency with regards to his own fees and the investments he has made on my behalf. I also feel that he undermines my knowledge and treats me as someone who is completely unaware of investment matters.
How AI Legalese Decoder can Help
The AI Legalese Decoder can assist in deciphering the jargons and legal terms related to transferring RRSP funds to a self-directed account with a brokerage like WealthSimple. It can provide comprehensive information on the steps involved in initiating such a transfer and whether any involvement from Investia or TDB is necessary.
Queries and Concerns
I have been contemplating the idea of transferring my RRSP to a self-directed account with a brokerage like WealthSimple, but I am unsure of the process and whether I need to deal directly with Investia or TDB. Additionally, I am concerned about the potential Deferred Sales Charge (DSC) fees and how I can determine the amount I will need to pay. While reviewing my portfolio breakdown, I noticed that all the funds mention the fee type as FEL, leading me to wonder if I would be exempt from any DSCs.
Empowerment and Future Plans
Having spent a considerable amount of time in education, I finally find myself in a stable position with no debt and a full-time job. This newfound financial stability has empowered me to take control of my money and seek better investment options. While I may have limited experience with self-directed accounts, I am determined to educate myself and make informed decisions about my investments.
Conclusion
Any advice or guidance in this matter would be greatly appreciated as I navigate the transition of my RRSP to a self-directed account.
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****** just grabbed a
2% MER in today’s market is insane. You’re getting fleeced.
Whenever you transfer an account you typically will complete the process with whichever institution is getting the account. Once you sign their form theyÔÇÖll submit it to the delivering institution on your behalf and then it’s processed.
DSC are deferred sales charges some mutual funds have. They have been phased out for the most part but if you sell them before they have matured you can face fees. Typical maturity on them is like 7 years I think. Front end or FE are funds that would have charged any fees when you bought them, they are no additional fees when you sell them ever.
Once you have set up an account (wealth simple or wherever) ask them ? They will get you to sign the paperwork and move over the securities.
Make sure it is an in kind transfer. Don’t sell yourself, withdraw cash and then move it over
You don’t even have to talk to your current advisor. Wealth simple or whatever brokerage may cover some fees depending on the size of the portfolio and costs incurred.
ÔÇ£ItÔÇÖs not me, itÔÇÖs you.ÔÇØ
Let me guess, a bunch of fidelity mutual funds with 2% MERs? Do these people get kickbacks for this shit or what?
You’ve got great advice on what to do, so I’m just going to congratulate you on getting a good start on saving early, you’ve put yourself in a great position to build on!
I transferred my investments, three times the value of yours, from my broker (also with Investia) to Questrade in 2021. I did research on investing during covid for almost a year before I pulled the pin and moved.
I feel so much better. I hated looking at my statements from him knowing I was getting screwed.
If you only receive one set of investment statements from Investia and not a secondary set of investment statements from TD Mutual funds, the transfer form is filled out to Investia. If you do get a set of TD statements, the transfer form gets sent to TD.
You don’t actually need to speak to him about your departure if you don’t want to, you can just send in the transfer forms.
If you have FEL there’s no DSC.
If you can manage your own investment, itÔÇÖll be the cheapest way to save but if you have zero knowledge then go learn something before breaking away and doing it on your own otherwise you may end up losing more than a 2% MER. Would you pay for cake for your wedding or would you bake it yourself? If youÔÇÖre a cake chef then sure but if you lack the experience why are you attempting to bake a cake? Go get some knowledge and then start baking.
I guess he gets a nice little commission on those TD mutual funds.
Abandon ship ASAP. Index funds.
Easy.
First, before you dump him, make sure to get the services you’ve been paying for. So if he hasn’t prepared a written financial plan for you recently, get him to do that.
Second, open your new account(s) at the brokerage of your choice. You mentioned Wealthsimple so I’ll use them in my example. Once the account(a) are opened, initiate the transfer out request via Wealthsimple, “in cash”, and submit it.
Then email him a written letter informing him that you no longer require his services as you have decided to self-manage, and you have begun the transfer process and he can expect to see the request in the next few days.
By doing it in this order, the wheels are already in motion before you let him know, so he won’t waste his time and yours trying to convince you to stay
Open
Honestly if you donÔÇÖt have a ton of money your advisor probably wonÔÇÖt care that you are switching.
Don’t just go by MER if he’s returning you 10 percent net of MER he’s not all bad.
Otherwise easiest way is to just request the money from TD or wherever it is by initiating a transfer from your receiving bank. Example you want to move money to wealthsimple? Open a Ws account and ask customer service to move your funds. They’ll need your account numbers and potentially a recent statement. Thats it. You don’t have to talk to the advisor. The process will be automated and dealt by WS or any receiving bank
Finally, not through him, but you’re early 30s, life insurance is only gonna get more expensive. Look into quotes for yourself, in case you have a mortgage or big debts you’d like taken care of in case of earlier demise. Luckily as a female yours is cheaper than that for a 31M
You donÔÇÖt say anything. I work in wealth management for one of the big banks and anything under $250k we donÔÇÖt even get PAID on, so having a client with like $66k leave is a blessing.
Just transfer out. You donÔÇÖt need to make a big deal out of it. You donÔÇÖt even need to talk to TD.
IÔÇÖm letting go of 40 clients this year – if some of them left on their own it would save me from having the awkward conversation.
DSCs havenÔÇÖt existed at the big banks for more than a decade.
Probably set up a new brokerage to do it yourself. Fill out the paper work to transfer in cash. Then boom donÔÇÖt even have to say anything
Recently I went through this exact situation with my wife.
She was extremely hesitant to leave, she knew she didn’t have a great deal and was being overcharged but she hates changing anything, especially banking.
And probably didn’t want to call the FA and say she’s leaving.
I eventually convinced her to move to wealthsimple, they did everything when it came to moving the money and she didn’t even need to ‘break up’ with him.
He didn’t even call to ask why she left so I guess her money wasn’t worth much for him.
Super simple. Just call wealthsimple and they will take care of the transfer. I did this with all of my mutual funds. And I regret not doing it sooner….
I donÔÇÖt know if this helps or applies, but logging onto your CRA account you could also remove them as the representative
Open up a self diected rsp account and transfer those funds into it. Learn about GICs and ETFs like VOO, QQQ which have miniscule fees as they sre exchange traded. Congrats for your insights into the financial planner world.
Can’t wait the call your advisor will make to you after the transfer loll
Initiate it from wealthsimple don’t talk to him lol
Your advisor is getting a very high commission on these Mutual Funds. This is the reason they push for these. Their interest are above yours iconically with your money.
I remember stressing big time about how to word the email. I labored over it and sent it, palms sweating. I got a single-line ÔÇÿthanks for the updateÔÇÖ from those idiots.
Lost $15,000 that year.
We pulled out from an FA a few years ago. Brought my parents money a year or two after educating myself. Save yourself first.
This looks like a really shitty firm like world source. How in the hell can he file your taxes?! ItÔÇÖs illegal for an advisor to do that. Also, DSC funds were banned a few years ago. I doubt you hold these.
All you have to do is sign a transfer form and you can move the assets. HeÔÇÖll probably call and try to convince you to stay, just ignore him.
This guys sounds really shady.
Learn a bit of financial investment knowledge. At least learn about the different type of investment mechanic you can use.
RRSPs are preferred by Financial advisors because they make commissions on them. ETF are generally lower risk, long term investments for beginners. You invest across the market and it does go up and down with the economy cycles, but generally better returns than savings or rrsp.
Once you’ve picked 1-3 financial investment types you want to use, then find a tool to manage them. You can either keep the funds where they are and drop the FA or you transfer the funds to your new management tool. Beware of taxes when transfering types of funds. And don’t forget you can use TFSA and manage that money yourself.
Is the RRSP sitting in TD account or in that Investia thing? If the former, transferring the account to WealthSimple is straight-forward. There should be a button “transfer account” somewhere and it will take you step by step. Note, that transferring a registered account takes time (could be couple of month).
You do not have to reach out. Open an account and submit the transfer papers.
He may call when the transfer request hits his desk.
I have 2 questions:
1) Is your TFSA maxed?
2) Are you able to contribute to your FHSA?
Pretty sure all you need is an account number and a new bank, provide it to the new bank and they will handle the transfer out, pretty sure you donÔÇÖt need to do anything else.
Typically your new brokerage, letÔÇÖs say wealthsimple for example, will pull the money from your current brokerage when you give them your account number. You likely donÔÇÖt even need to tell current advisor. One day the account will just be good. Good on your btw, youÔÇÖre making the right decision
Some advice has been good here, some has been bad. The good news is that whatever you decide to do, you don’t necessarily need to talk to your advisor, at all.
Since your investments are FEL, and there is no DSC, you can simply open up an RRSP account anywhere else, for example wealthsimple. (you’ll want to use their trade platform to access ETFs, and not the managed investing platform) You then initiate an account transfer, and you will choose to full transfer in cash. You can’t do transfer in kind because wealthsimple does not carry TD mutual funds, which means your investments will be sold and turned into cash in the investia RRSP, then transferred over to your wealthsimple RRSP.